Intel Set to Report Q1 Earnings

 

Intel Corp., the semiconductor titan, is expected to release its quarterly revenue on Thursday, April 27, after the closing bell. The report will include Intel’s financial performance in the first three months of the fiscal year 2017. 

For years, the revenue for the world’s biggest chip maker has frozen since sales of personal computers weakened due to the rise of smartphones. Moreover, smartphone manufacturers have chosen different suppliers for the operating systems of their devices. 

As Intel lagged behind the so-called mobile boom, the company’s biggest change in its results is yet to come. Intel investors should watch out for three important issues surrounding the semiconductor giant. 

Here’s what to expect: 

PC Market

The management of Intel would want to move resources away from the PC market this time. Though, there have been reports from Dell and other market trackers on PC sales, which show strong signs that the market is still stable.

Intel is moving towards automotive computing, the Internet of Things and other sectors promising higher growth. 

Data Center

As the data-center story is now grounded on cloud-computing, Intel saw that cloud service providers increase by 24% year-per-year compared to the old enterprise of hardware servers. Such markets seem to be at an advantage for a long time. 

Guidance

Last January 26, along with its 2016 financial results, Intel Corp. issued a detailed financial guidance for 2017 containing revenue, gross margin, operating income as well as the earnings-per-share-estimates. 

Checking Intel’s guidance for 2017 can provide a clear view of how the company is shaping up. However, it says that its financial guidance assumes that the personal computer market will dip – somehow pessimistic than ongoing forecasts. Yet, Intel is just being cautious as it had seen an overturn back in 2014 when sales in personal computer crashed.

For analysts, they are saying that Intel’s earnings can peak expectations since PC sales are in a continued stabilization – which happens to be Intel’s biggest source of revenue. Though Intel projected a 5% drop in PC sales, International Data Corp. and Gartner Inc. are saying otherwise. 

Lastly, a report released in the FactSet states that out of the 41 analysts covering Intel, 24 of these gave the company as a Buy or Overweight rating and only 3 passed a Sell or Underweight rating. 

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